Mixed economy is the hybrid of free market and command economy. In mixed economy both the private and public sector need to co-exist to overcome the weakness of one another. Most countries practice mixed economy for a number of reasons as mentioned below.

Where there is free market enterprise economic forces are unfettered. Supply and demand determine the prices of goods and services. Prices in turn tell businesses what to produce, if the people want more of a particular good than the economy is producing the price of the good rises. That catches the attention of new or other companies that sensing an opportunity to earn profits, start producing more of that good. If people want less prices fall and competitive producers either go out of business or start producing different goods. This is more efficient as compared to command economy were the government which relies on tax revenues, is far less likely than private businesses to heed price signals or to feel the discipline imposed by market forces. However there are limits to free enterprise, some services are better performed by the public rather than the private sector.

Private enterprise is profit oriented; they are very responsive to market. In the period of boom strong demand for their goods and services will lead to rise in employment. On the other hand in recession companies will not tolerate excess labours as keeping idle workers will raise production cost. Therefore private workers stand a chance to lose employment, at such times the government regulates business or puts legal anti-trust constraints on such business behavior. This hence shows the need for both the public and...

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An American social entrepreneur, David Green, recently stated the following: “Let’s face it. The market economy is based on a fundamental deception: I (a company) know how much it costs to make something, and I’m going to fool you, the consumer, into paying as much as possible. I find this assertion false and misguided. While some markets are more desirable than others, no one is being fooled into paying as much as possible. In the following essay I will evaluate each of the four market types (monopoly, oligopoly, perfectly competition, and monopolistic competition) and discuss why I believe Mr. Green’s statement is incorrect.
Markets are the heart and soul of a capitalist economy, and different degrees of competition lead to different market structures, with differing implications for the outcomes of the market place. Each of the above mentioned market structures describes a particular organization of a market in which certain key characteristics differ. The characteristics are: (a) number of firms in the market, (b) control over the price of the product, (c) type of product sold in the market, (d) barriers to new firms entering the market, and (e) existence of nonprice competition in the market.
A perfectly competitive market is an idealized version of market structure. Three conditions are necessary before a market is considered perfectly competitive. These are: homogenous products, existence of many sellers and buyers, and perfect...

...Explain how economic systems attempt to allocate and make effective use of resources.
Because we live in a world where resources are scarce economic systems make use of market structures such as the perfectly competitive market model as a benchmarking tool in order to better understand consumer behaviour and recognise areas of their market structures that require improvement and how they could possibly achieve this in the most efficient and effective way.
The theory of perfect competition is based upon five pre conditions namely: Homogenous product. All the firms within a industry sell the same product. Consumers have no reason to prefer one seller’s product to that of another seller. For example: Farmers selling peas on a weekend market.
Absence of artificial constraints. Any new firm is free to enter the industry and start producing/offering services, just as existing firms are free to stop producing/ offering services and exiting the industry. No legal barriers fixing prices within the industry exist and existing firms also have no power to fix prices either. For example: The existing pea farmers could not prevent new farmers from planting peas and selling them in the market.
Perfect knowledge. Customers have perfect knowledge regarding the products being sold and the prices being charged by all the firms in the industry. For example: Customers know that all the peas the farmers sell on the market are of the same kind, quality...

...technology needs of human kind. Samsung is a $160 billion company. Through research, reliability and a talented workforce, Samsung is able to provide technological solutions for our everyday lives. Samsung is known for its TVs however they have penetrated into the mobile phone market. They have come up with creative technology such as the Smart TV and Smart Camera. They continue to invest heavily into their research and development so that they can produce products that are efficient and effective. The war for market share goes on yet Samsung is able to maintain a high market share in TVs and smartphones. It is the innovative ideology of Samsung that has driven it to the top.
Smart Camera &amp; Smart TV as a monopoly
What is Monopoly?
In Economic terms ‘Mono’ means ‘one’ and ‘Poly’ means ‘Seller’. So basically it occurs when there in only one seller of a particular commodity in a market. There is no close substitute for the product in the market so the seller has complete power to set its prices high as there is no competition. Usually monopoly companies try to exploit consumers by charging higher prices as consumers have no other choice, this leads the company to maximize profits. Perfect Example of a Monopoly is Samsung’s Smart Camera and Smart TV.
How is Samsung Smart Camera a Monopoly?
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...|Business Economics and the Distribution of Income |
By the end of these course notes students are expected to have covered the following from the specification:
• The range of market structures
• How costs and revenues vary in different market structures
• Changes in costs and revenues in different market structures
The range of market structures
|Type |Perfect competition |Imperfect competition |Oligopoly |Monopoly |
|Example |Financial markets and |Small service sectors, |Supermarket chains, banking|Microsoft? |
| |commodities |bars, restaurants | |The Beckhams? |
For the range of market structures the important competitive factors seem to be a) number of buyer and sellers, b) number of competitors, c) the degree of product differentiation, d) the level on entry and exit barriers.
Normal and super-normal profits
Economic profits are revenues – costs but in assessing costs the Economist also takes into account returns to investors.
Normal economic profits are equal to the rate of return from the economy e.g. a bank account (taking into account risk of investment etc).
Supernormal profits are...

...consumers because it can drive up the prices of goods. Advertising can also be beneficial to consumers in that it can lead to a more informed purchasing decision by the consumer. Advertising can have a positive and negative effect on firms and consumers.
A Monopoly firm can charge prices higher than the marginal cost. These firms differentiate their products to appeal to the consuming public. They try to obtain and keep that customer through product differentiation. Many consumers will pay a higher price for a product that is best related to their wants and tastes. A government patent gives that firm an exclusive right to a new product for 20 years from the date of invention. Firms with patents can charge higher prices and make an economic profit over this time. The government encourages patents as firms gain inspiration to do research and invent better products for consumers. This, in turn, increases the standard of living in general.
Collusion is illegal in the United States and that is a good thing for consumers. Collusion “is an agreement among firms to charge the same price or otherwise not to compete” (Hubbard & O’Brien, 2010, p. 436). This strategy is beneficial for companies as they can eliminate competition and earn maximum profit for their product. However, it puts consumers at a disadvantage. Participating in collusion can lead to company fines and imprisonment of the management involved.
If Microsoft and Sony agreed to charge...

...Westfield shopping centre across Australia, as well as independently, close to access to public transport. The National Association of Retail Grocers of Australia reported that Woolworths and Coles comprised a 79% share of the market (AAP, 2007).
High barriers to entry, in particular financial barriers, including set up costs, distribution and advertising, are also evidence that this is an oligopoly market structure. In addition to this, mutual interdependence, whereby Woolworths and Coles are constrained in their competitive activity, and the use of heavy advertising as a means of attracting more market share in avoidance of price competition, also indicate the oligopolistic nature of this industry, as do large economies of scale.
1. Economic Analysis
*For the purpose of the discussion Walmart has been used as an example throughout.
Duopolies occur largely because of the existence of barriers to entry in an industry. In this instance, the major barrier to entry is financial. Large set up costs, distribution and operating costs, as well as advertising costs exist for any firm considering challenging a duopoly. In addition to this, barriers to entry exist in the form of controlling resources. Woolworths and Coles would have agreements with farmers to supply exclusively to them, in exchange for the firm purchasing all of their quality produce. Woolworths and Coles are also more likely to be able to purchase products, including fruit and vegetables, for...